Taxonomy: Final report of the Technical Expert Group on Sustainable Finance 2020

The EU Taxonomy is a tool to help investors, companies, issuers and project promoters navigate the transition to a low-carbon, resilient and resource-efficient economy. The Taxonomy sets performance thresholds (referred to as ‘technical screening criteria’) for economic activities which: • make a substantive contribution to one of six environmental objectives (Figure 1); • do no significant harm (DNSH) to the other five, where relevant; • meet minimum safeguards (e.g., OECD Guidelines on Multina…

The EU Taxonomy is a tool to help investors, companies, issuers and project promoters navigate the transition to a low-carbon, resilient and resource-efficient economy. The Taxonomy sets performance thresholds (referred to as ‘technical screening criteria’) for economic activities which: • make a substantive contribution to one of six environmental objectives (Figure 1); • do no significant harm (DNSH) to the other five, where relevant; • meet minimum safeguards (e.g., OECD Guidelines on Multinational Enterprises and the UN Guiding Principles on Business and Human Rights). The performance thresholds will help companies, project promoters and issuers access green financing to improve their environmental performance, as well as helping to identify which activities are already environmentally friendly. In doing so, it will help to grow low-carbon sectors and decarbonise high-carbon ones. The EU Taxonomy is one of the most significant developments in sustainable finance and will have wide ranging implications.